Japan's Sony Corporation has made a substantial $400 million investment in the Chinese video-sharing website Bilibili. The Japanese conglomerate purchased a minority stake in the Chinese firm, aiding its ambitious domestic expansion plans.

Sony purchased the minority stake in the Chinese firm through its subsidiary Sony Corporation of America. The company purchased a total of 17.3 million newly issued Class Z ordinary shares. Sony mentioned on Thursday that the transaction also included an agreement to enter into a business collaboration pact.

The amount Sony paid for the shares valued Bilibili, which is also popularly known as B site in China, at around $8 billion. The purchase will give Sony a 4.98 percent stake in the entertainment platform operator with the deal expected to be completed this week.

Bilibili chairman and chief executive officer, Chen Rui, mentioned in a statement that the strategic investment aligns perfectly with its goals of providing best-in-class content to its users. Chen stated that the company is looking forward to working with Sony and other international players to meet the growing entertainment demand in China and beyond.

The company stated that the added capital will be used to increase its position in profitable online entertainment segments such as mobile video games and animation. Sony will be working with Bilibili to pursue different opportunities within the segments for the Chinese market.

With Sony's support and the support of other investors, Bilibili hopes to become a formidable contender in the industry and compete with rivals such as Tencent, iQiyi, and Youku. The company's much larger rivals are backed by Tencent Holdings, Baidu, and Alibaba Group, respectively; all major players in China's booming online tech and entertainment industry.

Bilibili, which was established in 2009, has since become one of China's largest video comics and video games platforms. The company mainly targets younger generations, such as the fast-growing Generation Z market segment. In 2018, the company received backing from Tencent, which had invested more than $300 million. Last year, Tencent paid the company $113 million for it to exclusively stream the League of Legends World Championships. Tencent closed the three-year contract to stream the popular e-sport event.

Over the year, Bilibili has managed to significantly grow its content creators. For its latest quarter, the Chinese firm reported an 80 percent growth in its content creators to about 1 million. With more content on its platform, the company expects to reach up to 220 million monthly active users by its third quarter of 2021.